Know Your Benefits

Health plans may change with time. Know what to expect and how to respond with these tips on how to avoid unexpected changes.

Since Kristen Catton started taking the drug Gilenya two years ago, she’s had only one minor relapse of her multiple sclerosis, following a bout of the flu.

She can walk comfortably, see clearly and work part time as a nurse case manager at a hospital near her home in Columbus, Ohio. This is a big step forward; two drugs she previously tried failed to control her physical symptoms or prevent repeated flare-ups.

This year, Catton, 48, got a shock. Her health insurance plan changed the way it handles the payments that the drugmaker Novartis makes to help cover her prescription’s cost. Her copayment is roughly $3,800 a month, but Novartis helps reduce that out-of-pocket expense with payments to the health plan. The prescription costs about $90,000 a year.

Those Novartis payments no longer counted toward her family plan’s $8,800 annual pharmacy deductible. That meant once she hit the drugmaker’s payment cap for the copay assistance in April, she would have to pay the entire copayment herself until her pharmacy deductible was met.

Catton is one of a growing number of consumers taking expensive drugs who are discovering they are no longer insulated by copay assistance programs that help cover their costs. Through such programs, consumers typically owe nothing or have modest monthly copayments for pricey drugs because many drug manufacturers pay a patient’s portion of the cost to the health plan, which chips away at the consumer’s deductible and out-of-pocket maximum limits until the health plan starts paying the whole tab.

Under new “copay accumulator” programs, that no longer happens.

In these programs, the monthly copayments drug companies make don’t count toward patients’ plan deductibles or out-of-pocket maximums. Once patients hit the annual limit on a drugmaker’s copay assistance program, they’re on the hook for their entire monthly copayment until they reach their plan deductible and spending limits.

Catton put the $3,800 May copayment on a credit card. She knows her insurer will start paying the entire tab once she hits the pharmacy deductible. But, she said, she can’t afford to pay nearly $9,000 a year out-of-pocket for the foreseeable future.

“I’m talking to my doctor to see if I can I take it every other day,” she said. “I guess I’m winging it until I can figure out what to do.”

Drug copay assistance programs have long been controversial.

Proponents say that in an age of increasingly high deductibles and coinsurance charges, such help is the only way some patients can afford crucial medications.

But opponents say the programs increase drug spending on expensive brand-name drugs by discouraging people from using more cost-effective alternatives.

Switching to a cheaper drug may not be an option, said Bari Talente, executive vice president for advocacy at the National Multiple Sclerosis Society.

“Generally the multiple sclerosis drugs are not substitutable,” she said. “Most have different mechanisms of action, different administration and different side effect profiles.” Generics, when they’re available, are pricey too, typically costing $60,000 or more annually, she said.

Most MS drug annual copay assistance limits, if they have them, are between $9,000 and $12,000, Talente said.

Employers argue that the drug copayment programs are an attempt to circumvent their efforts to manage health care costs. For example, employers may try to discourage the use of a specialty drug when there’s a lower-cost drug available by requiring higher patient cost sharing.

There’s also the issue of fairness.

“From an employer perspective, everyone under the plan has to be treated the same,” said Brian Marcotte, president and CEO of the National Business Group on Health (NBGH), which represents large employers.

If someone needs medical care such as surgery, for example, that person doesn’t get help covering his deductible, while the person with the expensive drug might, he said.

According to an NBGH survey of about 140 multistate employers with at least 5,000 workers, 17 percent reported they have a copay accumulator program in place this year, Marcotte said. Fifty-six percent reported they’re considering them for 2019 or 2020.

If there is no comparable drug available, drug copayment programs may have a role to play if they can be structured so that participating patients are paying some amount toward their deductible, Marcotte said. But, he said, assistance programs for drugs that are available from more than source, such as a brand drug that is also available as a generic, shouldn’t be allowed.

In 2016, 20 percent of prescriptions for brand-name drugs used a drug copay assistance coupon, according to an analysis by researchers at the USC Schaeffer Center for Health Policy and Economics. Among the top 200 drugs based on spending in 2014, the study found that 132 were brand-name drugs, and 90 of them offered copay coupons. Fifty-one percent of the drugs with copay coupons had no substitute at all or only another brand drug as a close therapeutic substitute, the analysis found.

Advocates for people with HIV and AIDS say copay accumulators are cropping up in their patients’ plans and beginning to cause patients trouble. Drugs to treat HIV typically don’t have generic alternatives.

The biggest impact for the community their organizations serve may be for PrEP, a daily pill that helps prevent HIV infection, said Carl Schmid, deputy executive director at the AIDS Institute, an advocacy group. A 30-day supply of PrEP (brand-name Truvada) can cost nearly $2,000. Drug manufacturer Gilead offers a copay assistance program that covers up to $3,600 annually in copay assistance, with no limit on how much is paid per month.

“They’re at risk for HIV, they know it and want to protect themselves,” Schmid said. “It’s a public health issue.”

Earlier this month, the AIDS Institute was among 60 HIV organizations that sent letters to state attorneys general and insurance commissioners across the country asking them to investigate this practice, which has emerged in employer and marketplace plans this year.

Compounding advocates’ concerns is the fact that these coverage changes are frequently not communicated clearly to patients, Schmid said. They are typically buried deep in the plan documents and don’t appear in the user-friendly summary of benefits and coverage that consumers receive from their health plan.

“How is a patient to know?” Schmid asks. They learn of the change only when they get a big bill midway through the year. “And then they’re stuck.”

This month’s CenterStage features Hierl Benefit Advisor, Tonya Bahr, discussing the differences, similarities, and customizations of HSAs (Health Savings Accounts) versus FSAs (Flexible Savings Accounts), as well as how HRAs (Health Reimbursement Arrangements) may be a great add-on.

About Tonya

Tonya Bahr has 15 years of experience in human resources and benefits. Throughout her HR career, Tonya has been involved in benefit plan designs, wellness program implementations, and open enrollment facilitation. She has a passion for educating employees and business owners on benefit options, helping them make decisions that best fit their personal and financial objectives.

So, which is better for you: a FSA or a HSA?

Comparing the Differences

Health Savings Accounts (HSA) and Flexible Spending Accounts (FSA) are two popular ways employers can help their employees pay for out of pocket expenses associated with their healthcare costs. Both offer pre-tax advantages, which make them attractive. However, the names of these accounts really do distinguish their purposes. One is a SAVINGS account while the other is a SPENDING account.

Here are some tips and advice Tonya says to keep in mind when choosing between an HSA or FSA:

1. Unlike the FSA, an HSA is portable and flexible. You can never lose the money in the account (both employee and employer contributions) so if you change jobs, change plan types, or don’t use the money in a given year, it all goes with you. The amount you can contribute toward an HSA is greater and the balance in the account earns interest.

2. With an FSA, you can use the entire contribution amount upfront even if you haven’t contributed the full amount.

3. With an HSA, you can only use the money actually in the account, but the FSA allows you to use the full contribution amount elected.

4. You cannot contribute to an HSA and a full FSA at the same time. However, you can have an HSA and Limited FSA. Limited FSAs can only be used toward dental and vision expenses; whereas HSAs and full FSAs can be used toward medical, prescription, dental, and vision. HSA dollars can also be used to pay Cobra premiums, Long Term Care premiums, and Medicare premiums. Once an individual reaches age 65, money in an HSA can be spent on anything. The money is no longer earmarked for qualified medical expenses.

5. HSAs are only available with High Deductible Health Plans (HDHP). HDHPs can seem a little intimidating at first given employees are responsible for the deductible before copays apply. However, they offer lower premiums, which is money in an employee’s pocket, which can in turn be used to start funding an HSA.

HRAs

Health Reimbursement Arrangements (HRA) are a vehicle used to offset increased plan design changes and employee’s out of pocket responsibility. Under an HRA, an employer purchases a plan design (typically a higher deducible option or out of pocket maximum), but they offer their employees a different plan. The difference is paid by the HRA. Employees submit their claims to a third party who manages the HRA and then in turn sends the employee funds to cover the cost of care. This type of scenario can work well for groups that have a healthier population and don’t experience high claim costs.

The savings is in the premium reduction for going with a higher deductible option and the gamble that employees won’t meet the limits of the HRA. Employers take on a risk with this type of arrangement because if a lot of members experience high claims and meet the HRA limits, the employer is the one paying to fund the HRA.

To conclude, employers can have an HRA with either an FSA or an HSA, but there are restrictions on how far down a qualified HDHP can go and still be HSA-qualified. Tonya’s suggestion is to avoid this risk by contacting her and discussing your options. You can contact Tonya Bahr at 920.921.5921 for more information.

Health insurance benefits are expensive. The rising costs of health care has driven up insurance premiums to levels where many businesses have been forced to reduce these benefits or drop them altogether. There is, however another option that is less regulated, taxed less and typically results in cost savings: self funded health insurance. The problem is, it's not always the best option for all employers, particularly the smaller ones. And there's a number of reasons for this:
What is self funded health care a.k.a. self-insurance?

Self-insurance is a method of providing health care to employees by taking on the financial liabilities of the care instead of paying premiums to an insurance agency to do the same. In other words: when a person covered under a self-funded plan needs medical care, the company is financially responsible for paying the medical bill (minus deductibles). It's an alternative risk transfer strategy that assumes the risk and liability of medical bills for those covered instead of outsourcing it to a third party. It's a surprisingly common practice:

In 2008, 55% of workers with health benefits were covered by a self-insured plan….and 89% of workers in firms of 5,000 or more employees.
Most (but not all) self-insurance plans are administered by a third party, usually a health insurance company, in order to process claims. The bills are simply paid for by the employer. Health insurance companies act as a third party administrators in what are called ASO contracts (Administrative Services Only)

Another common component of self insurance plans is stop-loss insurance. This is a separate insurance plan that the employer can purchase to reduce the overall liability of claims. With this type of insurance, if claims exceed a certain dollar amount, stop-loss kicks in paying the rest. There are two kinds of stop-loss insurance:

Specific – covers the excess costs from larger claims made by individuals in the group
Aggregate – kicks in when total claims by the group exceed a set amount
For example, a company who self-insures their $1000 employees projects $100,000 in medical care claims for the year. If they purchase aggregate stop-loss insurance for claims that exceed 120% of the expected amount or $120,000, the insurance will pick up the bill for the remaining claims. If the company purchases specific stop-loss insurance at 200%, if any single claim exceeds $2,000, the stop-loss pays the remainder.

There are a number of financial and administrative advantages to using self-funded health insurance plans for employers. According to the Self-Insurance Institute of America (SIIA) these include:

The employer can customize the plan to meet the specific health care needs of its workforce, as opposed to purchasing a 'one-size-fits-all' insurance policy.
The employer maintains control over the health plan reserves, enabling maximization of interest income – income that would be otherwise generated by an insurance carrier through the investment of premium dollars.
The employer does not have to pre-pay for coverage, thereby providing for improved cash flow.
The employer is not subject to conflicting state health insurance regulations/benefit mandates, as self-insured health plans are regulated under federal law (ERISA).
The employer is not subject to state health insurance premium taxes, which are generally 2-3 percent of the premium's dollar value.
The employer is free to contract with the providers or provider network best suited to meet the health care needs of its employees.
There are, however, some drawbacks to self-insurance policies:

Health care can be costly, so heavy claims years can be extremely expensive
Self insurance isn't tax deductible the same way the costs of providing health insurance is.
Financial benefits are long-term, particularly with an investment component.
Small businesses at a disadvantage

Self insurance is much more prevalent for larger companies mostly because it is easier to predict health care costs from a larger group. The more people in the group, the less potentially damaging a single expensive claim will be to the plan overall. That's why less than 10% of companies with less than 50 employees use self-insurance. The graphic to the right [source: businessweek.com] gives a telling breakdown of its prevalence based on company size.

Because risk is more difficult to predict with smaller groups, stop-loss insurance is also more expensive for smaller businesses. The practice of “lasering”, or increasing deductibles for specific higher risk employees can also be much tougher on small firms. As a result, self-insurance tends to be a less cost effective option than it is for larger companies.

Another roadblock for small businesses is a lack of cash-flow that is necessary to finance self-insurance. This doesn't mean, however, that small businesses can't benefit from a self-insurance plan. In fact, an increasing number of small businesses still are. But fully understanding the risks and rewards for doing so can sometimes be difficult.
Regulations

Because the only 3rd party administration of insurance (stop-loss) is between the employer and the insurance company directly, it is not subject to state level regulation the way traditional insurance policies are. Instead, they're regulated by the department of labor under the Employee Retirement Income Security Act – ERISA. Benefit administrators must still comply with federal standards despite the lack of state regulation.

California SB 1431

California is considering a proposed legislation to regulate the sale of stop-loss policies to smaller businesses. On the surface, the regulation looks as though it is an attempt to prevent small businesses from taking on too much risk. But the true intentions of the legislation may be to prevent cherry-picking of generally healthier small businesses (effectively removing them from the health insurance pool). This cherry-picking would theoretically cause traditional insurance premiums to become more expensive.

According to the SIIA, SB 1431 would prohibit the sale of stop-loss policies to employers with fewer than 50 employees that does any of the following:

Contains a specific attachment point that is lower than $95,000;
Contains an aggregate attachment point that is lower than the greater of one of the following:
$19,000 times the total number of covered employees and dependents;
120% of expected claims;
$95,000

This legislation would effectively limit the options of small businesses as it would force them to purchase a more expensive low deductible stop-loss policies. And according to the SIIA, with this legislation, almost no small business under 50 employees would (nor should they) consider self-insurance as an option.

If the legislation is passed in California, it has been suggested that it is only time before other states follow suit and/or enact even stricter regulations on small businesses. The SIIA even has a facebook page dedicated to defeating the bill they say is:

“…unnecessary and will only exasperate the problem that small employers in California face in being able to afford the rising cost of providing quality health benefits to their employees.”

So while self insurance can be a relatively risky option for small businesses, with legislation like this, it could no longer be a realistic option at all… And, in effect: another competitive advantage big businesses will have over their smaller counterparts.

SHRM Connect is an online community where SHRM members can ask questions and get answers on a variety of HR topics. It’s a great place to network with other HR professionals and share solutions.

The conversation topics range from “HR Department of One” to Employment Law, are always insightful, and deal with some of the most pressing issues that HR professionals face in the workplace today.

While some of the conversations take on a more serious tone, others will deliver a bit of comic relief -- and on Fridays, I’ll be highlighting a conversation or two in hopes that you’ll take some time to visit. You may want to "lurk"… perhaps respond, but you’ll always learn something.

It’s a great community and I highly recommend checking it out.

While May is officially Mental Health Awareness month, HR must deal with employee mental health issues, and their effects on the workplace, all year long. This week’s highlighted conversations involve a few different scenarios. What would you do?

Subject: Self Harming

In the General HR area, a poster asks for advice on how to handle about a perceived case of self harming:

We have a new(er) employee that was observed by another employee to have cuts up and down her arm. The employee brought it to our attention out of concern. We thanked the employee and asked that she keep it confidential. We do not offer an EAP.

My thought is to speak with the employee that is self harming and let her know what was observed and just check in and see if she is ok. If she says everything is good, just leave it at that. If she mentions something is going on...or if she needs to seek treatment etc, go down that road.

For those of you who have experience with this, is this an ok approach? Is it best to not address it with the employee? Any other resources, since an EAP is not an option?

Thanks!

To read/respond to this conversation, please click here.

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Subject: Alcohol and Discussion of Suicide

In the General HR area, another poster asks for advice on monitoring an employee:

Know of an employee with an alcohol problem who has gone through treatment and released to return to work by the treating facility. Prior to admittance, she talked about suicide. What follow-ups by the employer would you suggest, other than a monitoring agreement for a period of time?

To read/respond to this conversation, please click here.

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Subject: WWYD

In the General HR area, yet another poster is wondering how others would handle a case of an employee with anxiety – and lots of absences:

I was hoping to get opinions on this situation, and I believe I know the correct way to follow up but I was interested to see what others would say.

We hired a non-exempt employee in July of this year. Since that time, this employee had 6 unexcused absences, and two preplanned days off. We accrue and allow employees to use their vacation leave from day one, and this employee essentially used all the time throughout the end of the year. Sick time is not available for employees until they've been employed for 90 days. This employee stated about a month ago after one of their absences that they has very bad anxiety, but does not have insurance they are unable to get medication or see a doctor. This employee never asked for any type of accommodation, and we actually even provided resources to assist with their anxiety. All of the times they called out after that conversation were simply because "i feel bad and can't come in". I received copies of the texts and they're pretty vague. They called out again on Tuesday after having a pre-planned half day off on Friday, and we decided to give the employee a final written warning with a 60 day timeframe to improve their attendance. Unfortunately the employee called out again yesterday with a very vague explanation and stated that 'I still feel pretty bad'.

After speaking with the managers over this department, we decided to terminate employment due to excessive absences. I explained that to the employee in the phone call and gave them an opportunity to explain themselves. I tried to create a dialogue in the event that we were missing something, but I just got 'heh. oh okay.'

Now this morning, I received a page long email stating this employee has rights under HIPAA that they didn't have to disclose the anxiety disorders that they have (we never asked, they disclosed it voluntarily). Also stated that they would have expected a written warning for their excessive absenteeism but not the fact we separated employment. They go on to blame us for other areas of lacking (training, etc) but said we amplified the anxiety problem because of the amount of training we were giving them.

I feel like this employee is looking for anyone to blame. It's an unfortunate situation but as an employer, we cannot read employees minds. If an employee needs an accommodation due to a medical condition, aren't they supposed to request it? How are we supposed to help with vague callouts?

The Internal Revenue Service (IRS) released its 2018 affordability rate, four information letters regarding the Patient Protection and Affordable Care Act (ACA), and its draft Forms 1094 and 1095. The U.S. Department of Labor (DOL) increased the McNamara-O’Hara Service Contract Act (SCA) health and welfare fringe benefit rate and issued compliance guidance for employee benefit plans impacted by Hurricane Harvey. The Centers for Medicare and Medicaid Services (CMS) projected Medicare Part D premiums for 2018. A U.S. District Court remanded wellness program rules to the U.S. Equal Employment and Opportunity Commission (EEOC) for reconsideration.

The Internal Revenue Service released its Revenue Procedure 2017-36 which sets the affordability percentage at 9.56 percent for 2018. Under the Patient Protection and Affordable Care Act (ACA), an applicable large employer may be liable for a penalty if a full-time employee’s share of premium for the lowest cost self-only option offered by the employer is not affordable (for 2018, if it’s more than 9.56 percent of the employee’s household income) and the employee gets a premium tax credit for Marketplace coverage.

Because the 2018 affordability rate is lower than the 2017 affordability rate, applicable large employers may need to reduce their employees’ share of premium contributions to maintain affordable coverage. Employers should double check their anticipated 2018 premiums now to prevent the need for mid-year changes.

IRS Information Letters 2017-0010 and 2017-0013 explain that the ACA’s employer shared responsibility provisions continue to apply. The letters state, “The [President’s January 20, 2017] Executive Order does not change the law; the legislative provisions of the ACA are still in force until changed by the Congress, and taxpayers remain required to follow the law and pay what they may owe.” Further, the letters indicate that there are no waivers from potential penalties for failing to offer health coverage to full-time employees and their dependents.

IRS Information Letters 2017-0011 and 2017-0017 address the continued application of the ACA’s individual shared responsibility provisions. Letter 2017-0017 states, “The Executive Order does not change the law; the legislative provisions of the ACA are still in force until changed by the Congress, and taxpayers remain required to follow the law, including the requirement to have minimum essential coverage for each month, qualify for a coverage exemption for the month, or make a shared responsibility payment.”

IRS Issues Draft Forms 1094/1095

The IRS issued draft Forms 1094-B, 1095-B, 1094-C, and 1095-C for the 2017 tax year. Coverage providers use Forms 1094-B and 1095-B to report health plan enrollment. Applicable large employers use Forms 1094-C and 1095-C to report information related to their employer shared responsibility provisions under the ACA.

There are no changes to the face of draft Forms 1094-B, 1095-B, or 1095-C. The IRS made one substantive change to draft Form 1094-C. The IRS removed the line 22 box “Section 4980H Transition Relief” which was applicable to the 2015 plan year only.

DOL Increases SCA Health and Welfare Fringe Benefit Rate

The U.S. Department of Labor (DOL) released its All Agency Memorandum Number 225 which increased the prevailing health and welfare fringe benefits issued under the McNamara-O’Hara Service Contract Act (SCA) to a rate of $4.41 per hour which is required in all government contract bids or other service contracts awarded on or after August 1, 2017.

There is a different rate for Hawaii. The new SCA health and welfare fringe benefits level for Hawaii will be $1.91 per hour for all employees on whose behalf the contractor is required to provide health care benefits under the Hawaii Prepaid Health Care Act (HPHCA). The new SCA health and welfare fringe benefits level will be $1.63 per hour for employees on whose behalf the contractor is required to provide health care benefits under the HPHCA and who are performing on contracts covered by Executive Order 13706 Establishing Paid Sick Leave for Federal Contractors.

The DOL issued guidance for employee benefit plans, plan sponsors, and employers located in a county identified for individual assistance by the Federal Emergency Management Agency (FEMA) due to Hurricane Harvey.

Because plan participants and beneficiaries may have difficulty meeting deadlines for filing ERISA benefit claims and making COBRA elections, the DOL advised plan sponsors to “act reasonably, prudently, and in the interest of the workers and their families who rely on their health plans for their physical and economic well-being. Plan fiduciaries should make reasonable accommodations to prevent the loss of benefits in such cases and should take steps to minimize the possibility of individuals losing benefits because of a failure to comply with pre-established timeframes.”

The DOL acknowledged that group health plans may not be able to timely and fully comply with deadlines due to a physical disruption to a plan’s principal place of business. The DOL’s enforcement approach will emphasize compliance assistance, including grace periods and other relief as appropriate.

CMS Issues Projected Part D Premiums for 2018

The Centers for Medicare and Medicaid Services (CMS) projects that the average basic premium for a Medicare Part D prescription drug plan will be $33.50 per month for 2018.

Court Remands Wellness Regulations to EEOC for Reconsideration

On August 22, 2017, the United States District Court for the District of Columbia held that the U.S. Equal Employment Opportunity Commission (EEOC) failed to provide a reasoned explanation for its decision to adopt 30 percent incentive levels for employer-sponsored wellness programs under both the Americans with Disabilities Act (ADA) rules and Genetic Information Nondiscrimination Act (GINA) rules.

The court declined to vacate the EEOC’s rules because of the significant disruptive effect it would have. However, the court remanded the rules to the EEOC for reconsideration.

Question of the Month

Based on the recent court decision to require the EEOC to reconsider its wellness program rules, does this mean that the EEOC rules no longer apply to employer wellness programs?

No. For now, the current EEOC rules apply to employer wellness programs. However, employers should stay informed on the status of the EEOC’s reconsideration of the wellness program rules so that employers can change their wellness programs’ design, if necessary, to comply with new EEOC rules.

HSAs can be a very effective tool for employees looking to save for their healthcare and retirement. But many employees are not knowledgeable enough to fully utilize their HSAs. Here is an interesting column by Eric Brewer from Employee Benefit News on what you can do to help educate your employees on the impartance of HSAs.

High-deductible health plans with health savings accounts are becoming more popular as benefits consumerism increases throughout the country. Enrolling your employees in HDHPs is one way to educate them on the true cost of healthcare. And if they use an HSA correctly, it can help them better manage their healthcare costs, and yours.

But understanding how an HDHP works and ensuring your employees will get the most out of an HSA can be tricky. In fact, a recent survey by employee communication software company Jellyvision found that half of employees don’t understand their insurance benefits. And choosing a benefits plan is stressful for employees because it’s a decision that will impact them for a long time. This is further complicated by the trend toward rising employee contributions and the issue of escalating healthcare costs. Employees are taking on more cost share — and that means plan sponsors have a greater responsibility to do a better job of educating them to make the best decision at open enrollment.

HSAs benefit the employee in a number of ways:
· Just like a retirement plan, HSAs can be funded with pre-tax money.
· Employees can choose how much they want to contribute each pay period and it’s automatically deducted.
· Employers can contribute funds to an HSA until the limit is met.

These are important facts to tell employees. But there’s more to it than that. Here are some tips on how to best explain HSAs to your workforce.

The devil is in the details: discuss tax-time changes

Employees using HSAs will see an extra number or two on their W-2s and receive additional tax forms. Here’s what to know:

· The amount deposited into the HSA will appear in Box 12 of the W-2.
· Employees may also receive form 5498-SA if they deposited funds in addition to what has been deducted via payroll.
· Employees must submit form 8889 before deducting contributions to an HSA. On the form they’ll have to include their deductible contributions, calculate the deduction, note what you’ve spend on medical expenses, and figure the tax on non-medical expenses you may have also paid for using the HSA.
· Employees will receive a 1099SA that includes distributions from the HSA.

Importantly, most tax software walks employees through these steps.

Dispel myths

A lot of confusion surrounds HSAs because they’re yet another acronym that employees have to remember when dealing with their insurance (more on that later). Here are a few myths you should work to dispel.

· Funds are “use it or lose it.” Unlike a flexible spending account, funds in an HSA never go away. In fact, they belong to an employee. So even if they go to another job, they can still use the HSA to pay for medical expenses tax-free.

· HDHPs with HSAs are risky. There are benefits to choosing an HDHP with an HSA for both healthy people and those with chronic illnesses. Healthy people benefit from low HDHP premiums and can contribute to an HSA at a level they’re comfortable with. On the other hand, people with chronic illnesses will likely hit their deductible each year; after that time, medical expenses are covered in most cases.

Help employees understand they’re in control

High-deductible plans with an HSA might seem intimidating, but they put employees firmly in control of their healthcare. This is increasingly important in today’s insurance landscape. When employees choose an HSA, healthcare becomes more transparent. They can shop around for services and find the best deal for services before they make a decision.

HSAs also give you control and flexibility over how and when employees spend the funds. Users can cover medical costs as they happen or collect receipts and get reimbursed later. Finally, employees don’t have to worry about sending in receipts to be reviewed. This means they must be responsible for using the funds the right way, or face tax penalties.

Resist ‘insurance speak’

As an HR professional, you may not realize how much benefits jargon you use every day. After all, you deal with benefits all the time, so using industry terms is second nature. But jargon, especially the alphabet soup of insurance acronyms that I mentioned earlier, is confusing to employees.

One tip is to spell out acronyms on the first reference. Second, simplify the explanation by shortening sentences so that anyone can understand it.

Here’s an example of a way to introduce an HSA:

A health savings account, also called an HSA, is a tax-free savings account. An HSA helps you cover healthcare expenses. You can use the money in your HSA to pay medical, dental and vision costs for yourself, spouse and dependents who are covered by your health plan. You can use HSA funds to pay for non-medical expenses, but you will have to pay taxes on them…

You get the idea.

As responsibility continues to shift to employees, they may need more education in small chunks over time to reinforce their knowledge. As the employer, it’s in your best interest to help employees choose the best plan and use it the right way.

Do you know which technology will be the most beneficial for your employee benefits program? Take a look at this article by Kimberly Landry from Benefits Pro on what employers should be looking for when searching for the right technology for the benefits program.

It’s no secret that we are in the midst of a revolution in how employers manage their insurance benefits. Enrolling and administering benefits was once a manual process involving plenty of paperwork, but much of this work has now shifted to electronic benefits platforms. A recent LIMRA survey, Convenient and Connected: How Are Employers Using Technology Today?, found that 59 percent of employers are now using a technology platform for insurance benefit enrollment, administration, or both. In addition, more than 1 in 3 firms that do not use technology are currently looking for a platform.

Brokers can provide value to their clients by helping them find a technology system that meets their needs. In fact, over one quarter of employers say their broker should have primary responsibility for researching and evaluating possible technology solutions. However, to do this successfully, it is necessary to understand what problems employers are trying to solve with technology.

The advantages of benefits technology tend to fall into two categories: improving the experience for HR/benefits staff and improving the experience for employees. While employers see the value of both aspects, it is clear that the desire for technology is driven more by HR needs such as reducing costs, improving management of benefits data, and reducing the time and resources needed to administer benefits, rather than employee needs (Figure X). In seeking technology, employers are, first and foremost, trying to make their own lives easier.

This provides insight into some of the key features employers are seeking in technology, many of which revolve around greater convenience in managing benefits. For example, 80 percent of employers say it is important for a technology platform to be accessible all year so they can use it for ongoing administration and updates, rather than a “one-and-done” enrollment system. Ongoing access is one of the top features employers look for in a platform, with sizable portions also specifying that they want a system that can enroll new hires and support ongoing life event and coverage changes.

I would love to find a product … that would allow us to reduce the amount of time that we spend during the enrollment process and also during the course of a year, adding employees or terminating employees.

—Employer with 65 employees (Voice of the Employer,LIMRA, 2016)

Similarly, 77 percent of employers want a technology system that can manage all of their benefits on the same platform, regardless of which carriers are providing the products. Consolidating benefits on one platform helps employers save time and allows them to quickly get a complete view of their overall benefits package in one place. In fact, employers that currently manage all of their benefits on one platform are more satisfied with their technology than those that don’t have this capability. Moreover, roughly 1 in 6 employers say the ability to handle all benefits in one place would motivate them to switch technology platforms.

Employers also want the convenience of a platform that integrates smoothly with other technology systems, including carrier, payroll, and HRIS systems. When it comes to carrier systems, employers want to feel confident that no errors are occurring in the data transfer and don’t want to spend a lot of time checking for mistakes.

Our HR benefits administrator has spent an exorbitant amount of time trying to, literally person by person, dependent by dependent, go through each little piece and figure out why somebody's kid is getting dropped…So I think I'd like to see those communications [work] a little bit better.

—Employer with 320 employees

Employers also want technology to integrate with their payroll and other HRIS systems so they do not have to make changes in multiple systems, which is perceived as time-consuming and inefficient.

And those two systems...they don't communicate with each other... Without that communication, it's almost like double work because if there's an address change or anything like that, you have to go to one system, then go to another, and that just seems broken to me.

—Employer with 32 employees

While employers are primarily seeking convenience for their own HR staff, it is important to note that they would like this value to extend to their employees as well. Overall, 85 percent of employers think it’s important that an enrollment platform be easy and intuitive for their employees to use. In fact, user-friendliness is often one of the first priorities that comes to mind when employers describe their ideal platform.

I want to make sure it's easy, as simple as possible, as fast as possible, and I don't want it to be a burden every year.

—Employer with 30,000 employees

When it comes to selecting benefits technology, it is clear that convenience is key. By guiding employers to technology solutions that will make it quicker and easier to administer benefits, brokers can improve the experience for everyone involved and help the industry move into the future.

Has there been an increase in demand from your employees to offer more voluntary benefits? Check out this great article by Whitney Ehret from Employee Benefits Adviser on what you can do to meet your employees' demand for more voluntary benefits.

Over the years, voluntary benefits or worksite products have unfortunately earned a negative reputation in the marketplace. This is largely due to overzealous carriers with aggressive sales tactics and brokers purely seeking higher commissions.

With the introduction of the Affordable Care Act in 2010, employers began to shift more of the benefits cost to employees via high-deductible health plans, increased coinsurance costs and copays. The majority of today’s workforce is comprised of millennials, coupled with Generation Z quickly entering the workforce. There’s no question: traditional employer benefit offerings are about to undergo some major changes.

With a new administration in place and increasing generational challenges, employers are becoming more open to creative ideas to improve their total benefits offering. Today’s voluntary benefits market isn’t shy of options, which in turn makes things quite confusing. Companies will need to shift focus from traditional offerings and begin to get more resourceful — not only with the products they offer, but also with their entire strategy. Communications, enrollment and marketing will all become especially critical in retaining and attracting top talent in the coming months and years.

For the most part, the majority of brokers and employers are somewhat familiar with the top voluntary products in the market: dental, vision, accident, critical illness, cancer, hospital indemnity, disability and life insurance. Those are traditionally the products that spark initial voluntary benefit conversations, although there are many more — including legal, identity theft, auto/home, pet, employee purchasing programs, unemployment gap, tuition and loan assistance programs.

For the remainder of 2017, the conversation is predicted to still involve the top voluntary products, but shift to a new focus. Nearly two thirds of employers are looking to voluntary benefits to reduce overall financial stress on employees, the 2016 Xerox HR Services Financial Wellbeing & Voluntary Benefits Survey found. Integrating voluntary benefits with core benefits may reduce financial stress that ultimately leads to health issues and higher overall benefit costs.

The main goal of these products is to provide employees with cash resources, paid directly to the insured, should they experience an unexpected life event. Insureds can use these payments for anything they choose: mortgage, rent, groceries, deductibles, coinsurance payments, copays and more. Compared to state disability programs, these payments are generally made more quickly and offer a simpler claim filing process. If an employee is faced with a difficult situation, these conveniences can greatly reduce stress during a highly sensitive and vulnerable time.

Financial wellbeing is the focus
A recent Employee Benefit Newsarticle found 89% of millennials are interested in receiving financial advice, yet only 58% have been offered this type of assistance. With the majority of the workforce now comprised of millennials, employers will need to offer more diverse benefit options that are tailored to this population.

Millennials aren’t the only ones who are concerned about their financial wellbeing. The MetLife’s U.S. Employee Benefit Trends Study found 49% of employees are concerned, anxious, or fearful about their current financial situation, 72% said that a customized benefits package increases loyalty and only 27% are satisfied with their progress toward paying down student loans. These statistics demonstrate the immediate need for a comprehensive voluntary benefit offering.

Student loan debt is an issue for all generations in the workforce. Whether the individual is a millennial trying to get established and create wealth, a Gen X employee who is struggling with existing student loan debt family debt and saving for retirement, or a baby boomer who is trying to help support the family’s educational needs — namely children and grandchildren — everyone, at some level, has a need for student loan assistance.

Additionally,most voluntary products offer wellness benefits, which is a direct payment to the individual for completing an annual wellness exam. With amounts ranging between $50-$200 (employer selected), this is pure profit to the individual, since ACA requires preventative exams to be covered 100% by insurance carriers.

In addition, this benefit helps to subsidize the actual cost of the product annually. There are carriers in the market that will pay this benefit multiple times in a single year for a single insured.

Increasingly, companies are getting involved with wellness specific initiatives and incentives for their employees to hopefully drive healthy habits that will, in turn, lower healthcare costs and increase workplace satisfaction. To promote these wellness programs, employers offer reduced pricing on their medical plans or make contributions into a medical savings account if employees complete their annual exams or participate in various wellness activities. Offering voluntary products with a wellness benefit is another way to enhance a company’s total health portfolio at no cost to the employer.

Carrier selection Is key
Like many other industries, this business is all about relationships. Brokers and employers need to be able to trust and rely on their voluntary benefits carriers. As HR staffing has shrunk and brokers are required to provide more services with the same resources, it’s imperative that the appropriate carrier is selected for each unique case.

Voluntary benefits, as “cookie-cutter” as we may perceive them to be, are just not that. Since their onset, voluntary benefits have come with administrative obstacles that have historically taken up too much of HR’s time.

Unfortunately, while these products do provide a valuable benefit to employees, they are not the priority for most employers. Employers don’t often care about how many products they are offering as long as the plans aren’t administrative-heavy, the 2016 Employee Benefit News annual survey found. Carriers recognize this issue, and have steadily made improvements to these processes over recent years.

There are carriers in the marketplace today that allow clients to self-bill and self-pay, which is essentially what employers are already used to doing on their basic and supplemental group life and AD&D plans. For claims issues, they have also made this process easier by making it electronic and not requiring extensive information from the employees in the claims-filing process.

Core carriers (traditional medical carriers) are also beginning to get into the worksite market and are further simplifying the claims process by linking their medical system with their voluntary system. This allows the carrier to proactively initiate claims and file complete claims for the insured since the majority of the claims information is already within the single carrier system.

The other benefit to offering voluntary plans with the core medical carrier is that often some products may provide additional benefits if employees have a certain medical condition. For example, voluntary dental plans will provide more cleaning exams per year if an insured is pregnant. Most insureds would not realize they have this benefit, but by linking these systems with a core carrier, the insured makes sure to get the most out of their plan.

Communication style and strategy are imperative
Not only is it important to consider the products and carriers that are offered, but also how they are enrolled and communicated. From the voluntary benefits perspective, these products have typically been enrolled face to face with employees. While this may be the best way to fully educate employees on their benefit options, that is no longer the future of employee benefits enrollment.

ACA has also helped enrollment move to the electronic platform because of the requirements made on employers for reporting. Millennials are the technology generation, making them naturally comfortable using technology to enroll and learn about benefits and even be treated by a virtual doctor.

Employers are trending toward a more self-service enrollment environment, which brings its own challenges. Most of these systems are built with decision tools that allow for the enrollment experience to be customized to the employee. These tools will make plan recommendations for the employees based on the answers to health and financial questions. Often, videos within the enrollment site are used to further enhance the educational experience.

Some of the main problems with electronic enrollments include keeping employees engaged, offering voluntary benefit products and carriers that work with the system, keeping costs low or free for the employer and ensuring data accuracy and security.

A company’s overall benefits package is becoming increasingly important in the decision-making process for prospective employees, as well as to retain top industry talent. Employers, rightfully so, are concerned about cost and maintaining this delicate balance while still attempting to manage the complex administration of these plans.

More and more, employers are looking for voluntary benefits to solve this need by offering “free” technology and enrollment solutions to their groups. There is no doubt that if employers want to retain and attract top talent, they are going to have to adapt with the market and offer their employees a wide array of benefit options and new technology that is tailored to their employee needs.

Who doesn't love taking a vacation from work? Vacation time is a great benefit that employers can offer that has been shown to improve performance among employees. Find out more about how vacations can be beneficial for both employees and employers in this great article by Amanda Eisenberg from Employee Benefit News.

Employers who want to boost employee performance may want to encourage workers to take a break from working.

New research indicates that high-performing employees take more vacation time, suggesting that a generous — or unlimited — vacation policy benefit has a positive impact on the workplace.

The report from HR technology company Namely analyzed data from more than 125,000 employees and found that high performers take about 19 days of paid time off a year, five more than an average performer under a regular PTO plan.

Still, vacation time is underutilized, the firm said. Nearly 700 million vacation days went unused last year, but 80% of employees said they felt more comfortable taking time off if a manager encouraged them.

Namely said that unlimited vacation policies may be beneficial for employers, adding that it’s a myth that employees with such benefits abuse the policy. For the 1% of companies that offer unlimited vacation days, employees only take about 13 days off, according to Namely’s “HR Mythbusters 2017” report.

“Unlimited vacation time can be a strong benefit that increases employee engagement, productivity, and retention — but only if the policy is actually utilized,” according to the report.

Computer software company Trifacta, for example, encourages its employees to use their paid time off with a recognition program.

“We offer a discretionary PTO policy because we want people to truly take the PTO they need,” says Yvonne Caprini Sorenson, Trifacta’s senior manager of HR. “We have a recognition program called Above + Beyond. Employees can nominate high-performing peers, and the winners receive $1,000 to spend toward travel. It’s a great way to encourage vacation use and to make it clear that Trifacta supports work-life balance.”

Are your employees struggling to reach their financial goals? Here is a great article by Heather Garbers from SHRM on what employers can do to help their employees reduce their financial stress and reach their monetary goals.

More American workers are living paycheck to paycheck than ever before, just making ends meet. Nearly three-fourths have less than $1,000 saved; and 34 percent have nothing in savings. Student loan debt totals over $1.3 trillion among some 44.2 million borrowers in the U.S. Unexpected expenses are not budgeted for and people are placing themselves at great financial risk.

As HR practitioners, we need to recognize that people are struggling financially – and that it is taking a toll not only on them personally, but also in the workplace. There are innovative benefit options and strategies that can help relieve financial stress on employees:

Student loan assistance. Today’s Millennials are challenged to get their lives going despite the crushing burden of student loan debt, and trust their employers for advice on how to manage it. Doing so can make you stand out in attracting the best talent and help win loyalty. Programs are available that not only assist Employees in refinancing and managing their debt, but also allow you to make contributions to loan balances, and assist Employees in setting up a 529 savings plan.

Employee Purchasing Programs (EPP). When people are experiencing financial stress and are confronted with unexpected expenses, they may take on high interest credit card debt or a payday loan. Employee purchasing programs are a great way for them to avoid amassing high interest rate charges when purchasing consumer goods.

Low Interest Installment Loans and Credit. A major danger for financially stretched employees is the ease with which they can get payday loans or cash advances on their credit cards without fully understanding the risk. The exorbitant interest rates only worsen the vicious cycle of debt. There are services, however, that underwrite low-interest rate installment loans well below the going rates and allow Employees to make payments through payroll deduction. Employers can sponsor the service at no cost as a voluntary benefit, and Employees can use the funds however they need to – whether it is paying a medical bill or purchasing a new air conditioner.

Financial planning and wellness services. Whether offered as one-on-one, personal coaching or online resources with interactive money management tools, everyone appreciates when employers offer resources to help them understand how to repair or build their credit and better manage their money. By offering these services, you have the opportunity to occupy a position of trust and cement long-term employee loyalty.